In 2005, the auto parts industry began to move toward the era of low profit

According to recent statistics from the national authoritative department, China’s auto parts industry was affected by the downturn in the entire automobile industry and the rise in the cost of steel products. Profits fell for the first time in 10 years. Relevant research shows that with the further intensification of market competition, the high profits of the domestic auto parts industry will disappear and will develop in the direction of meager profits in the future.
According to the analysis, the parts and components industry has been moving toward the meager profit era since 2005 and there are four reasons.
First, the entire vehicle industry passed on costs, resulting in a sharp decline in profits of parts and components companies.
Since last year, the entire vehicle industry has expanded its scale and stimulated consumer spending. Most of the parts and components companies have been severely affected by this, because the entire vehicle industry has passed part of the cost reduction to the supporting parts and components companies.
According to media reports, at the end of last year, FAW Car adjusted the price of more than 100 parts of Mazda6, and the maximum price reduction rate reached 40%. At the beginning of this year, Shanghai General Motors announced that the price of the parts and components of the respective models was reduced by the General Motors Corporation. A total of 505 commonly used parts and components were easily damaged. The average decline is nearly 21%, with the highest drop of 50%. Although spare parts companies have taken a variety of measures to remedy the situation, unprecedented pressure to reduce prices has made it difficult for companies to prevent them.
The second is that parts and components companies lower prices each other and reduce profits by themselves.
In general, there are 1 to 3 or even 3 to 4 parts suppliers for each component of the vehicle company and the main engine plant. Since last year, in order to expand their market share, some parts and components companies have begun to push each other to compete in the market while fighting for technology, quality, brand, and after-sales service. Once one has a slight defect, its competitors will use various means to squeeze it. Hit. This will inevitably lead to a decrease in the respective profits of competing companies.
Third, raw material prices rose sharply and squeezed the profits of spare parts companies.
In recent years, raw materials used for automobile production have risen sharply, adding to the cost burden of the entire vehicle industry and auto parts companies. Steel prices have the greatest impact on the automotive industry because steel is the main raw material for automobile production.
This year, the impact of rising raw material prices on the auto industry has been unavoidable. Although the recent decline in steel prices, pressure has eased, but its long-term impact is still profound. In particular, the parts and components manufacturing enterprises suffered heavy losses in the price reduction of the main engine plant and the price increase of raw materials. Many companies have reported that their profits have been running out very little this year.
According to the introduction of Hunan Jiangbin Machinery (Group) Co., Ltd., since 2003, the prices of aluminum ingots, copper, nickel, and magnesium used in the production of pistons have risen by a large margin, with an average increase of more than 30%. At the same time, the prices of its supporting host products have not only risen, but have also lowered prices year by year.
Fourth, international auto parts giants have squeezed market share, which has increased the pressure on local parts companies to survive and reduced profits.
In recent years, many influential international auto parts and components groups have entered the supply chains of domestic major auto and OEM companies with their advanced technology, quality, brand and after-sales service, and have seized market share at all costs and gradually realized localization. . It is understood that most of the top 20 auto parts companies currently ranked in the top 20 in the world have established offices or investment holding institutions in Beijing or Shanghai. For example, Delphi has established 15 joint ventures in China, manufacturing 100 A variety of auto parts and systems have become one of the strongest auto parts groups in the Chinese market.
These multinational giants have entered the Chinese market one after another, or they have established joint ventures and joint ventures, or set up wholly-owned sites, which are ferocious. For domestic parts and components companies, competition with international giants on the same stage, due to technical, management and other aspects difficult to rival opponents, is currently at a disadvantage.
In summary, the price reduction of the entire vehicle industry, the self-price reduction among the industries, the price increase of raw materials, and the impact of international giants all bring unprecedented pressure and challenges to Chinese auto parts companies. Experts predict that with the intensification of competition, the industrial cluster will be highly concentrated and the scale will continue to expand. In the future, auto parts companies will only be able to obtain meager profits through the increase in volume. A group of small-scale, weak technical forces and brandless auto parts The company will be eliminated.

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Exterior car door handles lets you access your car`s cabin. without them, doors are hard to open. Exterior door handles come in various shapes and styles but the operation is generally the same; pulling the lever out releases the hook from the vehicle frame`s latch.

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